FT and government in hot water over alleged preferential treatment

20 Jul 2006

The EC has revealed in a statement that it is to take the French government to the EU’s highest court – the European Court of Justice – over its failure to recover illegal state aid granted to France Télécom (FT) between 1994 and 2002. FT received preferential treatment from the government during this time in the form of tax breaks worth up to EUR1 billion. The EC ruled in 2004 that the government had to reclaim this aid. ‘The Commission’s decision defined the aid to be recovered as the difference between the amount of business tax that FT would have had to pay if the normal business tax law had been applied and the amount of business tax actually paid by FT,’ the EC said. In February 2005 the telco appealed against the 2004 order and maintains that the amount of money to be paid back had not been finalised. Today’s statement marks the EC’s response.

France, Orange Group